Closing Agent Jailed for Mortgage Fraud Crimes

Allison Tussey —  November 12, 2012 — Leave a comment

Crystal Paling, 52, Sussex, New Jersey, was sentenced to 37 months in prison for her role in a wire fraud and money laundering scheme involving phony mortgages issued for properties in New Jersey and Florida. 

Paling was convicted by a jury following a three-week trial before U.S. District Judge Peter G. Sheridan. She was found guilty of both counts charged in the Indictment against her: conspiracy to commit wire fraud and conspiracy to commit money laundering. Judge Sheridan imposed the sentence in Trenton federal court.

According to documents filed in this case and the evidence at trial:

Paling acted as the closing agent for fraudulent mortgage loans orchestrated by her co- conspirators, Daniel Verdia, 54, Mahwah, New Jersey; Jaye Miller, 63, Pocono Lake, Pennsylvania; and Sandra Mainardi, 52, Wayne, New Jersey. The co-conspirators put together buyers and sellers in real estate transactions that they could control and then filed false and fraudulent loan applications containing inflated income figures for the borrowers.

Paling wired loan proceeds due to the sellers from a trust account that she controlled to an account in the name of Capital Investment Strategies, a shell company owned by Verdia and Miller. She concealed illicit payments to Capital Investment Strategies by failing to disclose them on the settlement statements. She collected a portion of the disclosed closing fees that appeared on the settlement statements. She also received undisclosed kickbacks paid from Capital Investment Strategies to her own shell company, XL Partnership. Paling retained some mortgage loan proceeds in the trust account and used them to pay back the mortgages on certain properties in order to keep the loans in good standing until the lender’s buyback period expired.

In addition to the prison term, Judge Sheridan sentenced Paling to three years of supervised release and ordered her to pay $532,497 in restitution.

Five other defendants originally charged in the scheme have pleaded guilty and were sentenced for related charges: Verdia and Miller each pleaded guilty to one count of conspiring to commit wire fraud and money laundering and were sentenced to 30 months in prison and six months in prison, respectively; Donald Apolito, 40, Elmwood Park, New Jersey, pleaded guilty to tax evasion and was sentenced to five years of probation; and Robert Gorman, 64, Long Valley, New Jersey, pleaded guilty to subscribing to false tax returns and was sentenced to two years of probation. Mainardi pleaded guilty in Florida federal court to one count of wire fraud and was sentenced to 46 months in prison.

U.S. Attorney Paul J. Fishman announced the sentence.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; and special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark, for the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorneys Rachael A. Honig and Charlton A. Rugg of the U.S. Attorney’s Office Criminal Division in Newark.

Allison Tussey

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